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Friday, December 7, 2012

U.S. Federal Tax Return

United States Federal Income Tax

Letter dated January 3, 1862, from Treasury Secretary Salmon P. Chase to President Abraham Lincoln
recommending George S. Boutwell for the newly-created post of Commissioner of Internal Revenue.
The Abraham Lincoln Papers at the Library of Congress, American Memory Collections.

Far reaching in its social as
well as its economic impact, the income tax amendment became part of the
Constitution by a curious series of events culminating in a bit of political
maneuvering that went awry. Federal Income Tax, despite the remonstrations of many Republican
pundits and politicians,[1]
was not the brainchild of Woodrow Wilson but of Abraham Lincoln, whose congress enacted The Revenue Act of 1861, formally cited as Act of August 5, 1861.

The Act, motivated by the need to fund the Civil War, imposed an income tax to be "levied, collected, and paid, upon the annual income of every person residing in the United States, whether such income is derived from any kind of property, or from any profession, trade, employment, or vocation carried on in the United States or elsewhere, or from any other source whatever.." Rates under the Act were 3% on income above $800 (adjusted for inflation: $19,000 in as of 2010 dollars) and 5% on income of individuals living outside the country. The Revenue Act of 1861 was signed into law by Abraham Lincoln. This Act introduced Federal income tax as a flat rate tax. Income tax, modified several times by Congress, remained in force after the war, funding reconstruction until the Supreme Court declared the Income Tax Bill of 1894 unconstitutional in Pollock v. Farmers' Loan & Trust Co (1895).

William Howard TaftOfficial Presidential portrait

Fifteen years later, another Republican U.S.
President would champion federal income tax, this time as an amendment to the Constitution of 1787.
Specifically, President William Howard Taft, in an address to Congress, proposed
a 2% federal income tax on corporations by way of excise duties. The President also proposed, on June 16th,
1909, a constitutional amendment to legalize income tax.

To the Senate and House of Representatives:

It is the constitutional duty of the President from time to time to recommend to the consideration of Congress such measures as he shall judge necessary and expedient. In my inaugural address, immediately preceding this present extraordinary session of Congress, I invited attention to the necessity for a revision of the tariff at this session, and stated the principles upon which I thought the revision should be effected. I referred to the then rapidly increasing deficit, and pointed out the obligation on the part of the framers of the tariff bill to arrange the duty so as to secure an adequate income, and suggested that if it was not possible to do so by import duties, new kinds of taxation must be adopted, and among them I recommended a graduated inheritance tax as correct in principle and as certain and easy of collection. The House of Representatives has adopted the suggestion and has provided in the bill it passed for the collection of such a tax. In the Senate the action of its Finance Committee and the course of the debate indicate that it may not agree to this provision, and it is now proposed to make up the deficit by the imposition of a general income tax, in form and substance of almost exactly the same character as that which in the case of Pollock v. Farmers' Loan and Trust Company (157 U. S., 429) was held by the Supreme Court to be a direct tax, and therefore not within the power of the Federal Government to impose unless apportioned among the several States according to population. This new proposal, which I did not discuss in my inaugural addressor in my message at the opening of the present session, makes it appropriate for me to submit to the Congress certain additional recommendations.

The decision of the Supreme Court in the income-tax cases deprived the National Government of a power which, by reason of previous decisions of the court, it was generally supposed that Government had. It is undoubtedly a power the National Government ought to have. It might be indispensable to the nation's life in great crises. Although I have not considered a constitutional amendment as necessary to the exercise of certain phases of this power, a mature consideration has satisfied me that an amendment is the only proper course for its establishment to its full extent. I therefore recommend to the Congress that both Houses, by a two-thirds vote, shall propose an amendment to the Constitution conferring the power to levy an income tax upon the National Government without apportionment among the States in proportion to population.

This course is much to be preferred to the one proposed of reenacting a law once judicially declared to be unconstitutional. For the Congress to assume that the court will reverse itself, and to enact legislation on such an assumption, will not strengthen popular confidence in the stability of judicial construction of the Constitution. It is much wiser policy to accept the decision and remedy the defect by amendment in due and regular course.

Again, it is clear that by the enactment of the proposed law, the Congress will not be bringing money into the Treasury to meet the present deficiency, but by putting on the statute book a law already there and never repealed, will simply be suggesting to the executive officers of the Government their possible duty to invoke litigation. If the court should maintain its former view, no tax would be collected at all. If it should ultimately reverse itself, still no taxes would have been collected until after protracted delay.

It is said the difficulty and delay in securing the approval of three-fourths of the States will destroy all chance of adopting the amendment. Of course, no one can speak with certainty upon this point, but I have become convinced that a great majority of the people of this country are in favor of vesting the National Government with power to levy an income tax, and that they will secure the adoption of the amendment in the States, if proposed to them.

Second, the decision in the Pollock case left power in the National Government to levy an excise tax which accomplishes the same purpose as a corporation income tax, and is free from certain objections urged to the proposed income-tax measure.

I therefore recommend an amendment to the tariff bill imposing upon all corporations and joint stock companies for profit, except national banks (otherwise taxed), savings banks, and building and loan associations, an excise tax measured by 2 per cent on the net income of such corporations. This is an excise tax upon the privilege of doing business as an artificial entity and of freedom from a general partnership liability enjoyed by those who own the stock.

I am informed that a 2 per cent tax of this character would bring into the Treasury of the United States not less than $25,000,000.

The decision of the Supreme Court in the case of Spreckels Sugar Refining Company against McClain (192 U. S., 397) seems clearly to establish the principle that such a tax as this is an excise tax upon privilege and not a direct tax on property, and is within the federal power without apportionment according to population. The tax on net income is preferable to one proportionate to a percentage of the gross receipts, because it is a tax upon success and not failure. It imposes a burden at the source of the income at a time when the corporation is well able to pay and when collection is easy.

Another merit of this tax is the federal supervision which must be exercised in order to make the law effective over the annual accounts and business transactions of all corporations. While the faculty of assuming a corporate form has been of the utmost utility in the business world, it is also true that substantially all of the abuses and all of the evils which have aroused the public to the necessity of reform were made possible by the use of this very faculty. If now, by a perfectly legitimate and effective system of taxation we are incidentally able to possess the Government and the stockholders and the public of the knowledge of the real business transactions and the gains and profits of every corporation in the country, we have made along step toward that supervisory control of corporations which may prevent a further abuse of power.

I recommend, then, first, the adoption of a joint resolution by two-thirds of both Houses proposing to the States an amendment to the Constitution granting to the Federal Government the right to levy and collect an income tax without apportionment among the States according to population, and, second, the enactment, as part of the pending revenue measure, either as a substitute for, or in addition to, the inheritance tax, of an excise tax upon all corporations measured by 2 per cent of their net income.

Less than a month later,
the resolution now known as the Sixteenth
Amendment, was passed by the Republican controlled 61st
U.S. Congress.[2]

The state legislatures considered the Sixteenth Amendment during the presidential election of 1912
between William Howard Taft (Republican Party), Theodore Roosevelt (Progressive Party) and Woodrow Wilson (Democratic Party) who were all advocates of a federal
income tax. U.S. Senator Robert Lafollette’s National Progressive RepublicanLeague
supported Theodore Roosevelt over Taft. The splitting of the Republican
Party resulted in the election of Woodrow Wilson. And the 16th Amendment, on February 25, 1913, was ratified by 4/5th’s
of the States. Shortly thereafter, the new Democrat-controlled Congress passed
the Revenue Act of 1913, which was
enacted with President Wilson’s signature on October 3rd, 1913. The enabler of the current federal income tax
system, therefore, was not Woodrow Wilson but the Taft Administration and the
Progressive Republican Congress.

The Revenue
Act of 1913 implemented a federal government tax that
eventually would shift the balance of financial power between the federal
government and the States to the Bi-cameral U.S. Congress. Today the States often find themselves in a
position where the choice is either to adopt U.S Congressional legislation as a
state law or to lose federal funding.[3]
Under this new configuration, “the people” are now governed primarily by
federal, as opposed to State, laws.

The 16th Amendment also enabled the U.S.
Federal government to use its taxing authority to implement numerous new
programs, funded by income tax, such as social security.

President Roosevelt signing
Social Security Act into law, August 14, 1935

Most recently, Chief Justice Roberts sided with four other
Supreme Court Justices upholding the Affordable Care Act citing U.S. Congressional
power of taxation bequeathed to them by the 16th Amendment: "

The Affordable Care Act's requirement that certain
individuals pay a financial penalty for not obtaining health insurance may
reasonably be characterized as a tax. Because the Constitution permits such a
tax, it is not our role to forbid it, or to pass upon its wisdom or
fairness."

President Barack Obama reaches for a pen as he signs the health insurance reform bill in the East Room of the White House, March 23, 2010. (Official White House Photo by Lawrence Jackson)

According to the US Trust Fund Board of 1995:

The full potential of the income tax for revenue and for the redistribution of wealth was realized for the first time during the New Deal. President Franklin D. Roosevelt declared our revenue laws have operated in many ways to the unfair advantage of the few, and have done little to prevent an unjust concentration of wealth and economic power. The Revenue act of 1935 popularly called the Wealth Tax Act, went a long way toward remedying the evils described. It provided steeply graduated personal income taxes up to 75% on income in excess of $5 million. Wealthy Americans deplored the leveling effect of a graduated income tax and called President Roosevelt a ?traitor to his own class.? Almost immediately, income tax evasion became an important area of criminal activity.

The income tax did not directly affect most
Americans until World War II: In 1939 only 5 percent of Americans paid
federal income taxes. But the Revenue act of 1942 raised tax rates,
lowered exemptions, and created the Victory Tax of 5 percent on incomes over
$624, broadening the income tax base considerably. The new payroll
withholding tax was the greatest change for the majority of Americans.
The "Pay-As-You-Go" tax plan, developed by Beardsley Ruml, the
treasurer of the R. H. Macy department store, was adopted in the Current Tax
Payment Act of 1943. The result of the new tax plan was that over 74
percent of Americans were paying federal income taxes by 1945.

16th Amendment to the
Constitution - Image Courtesy of the US National Archives

American citizens, the documents the rights of actions of federal officials, and the national experience

Finally, it is important to note that the Sixteenth Amendment is a revenue law that remains subject to Constitution of 1787, Article I, Section Seven which states: “All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.” Therefore, power of income tax revenue bequeathed to the U.S. Bicameral Congress by the Sixteenth Amendment must originate from the House of Representatives. Additionally, since 1913 the tax codes that have sprung from the Sixteenth Amendment are so complex and time-consuming that more than 50% of Congressional members’ time is spent on revenue bills. Indiana University’s Center of Congress reports:

The work involved in doing this is arduous, and — a reflection of its importance — it is the single most time-consuming thing Congress does. One veteran observer of Congress, asked to estimate how much time Members spend on budgetary matters, replied: "Almost all." That's an exaggeration, but it may not seem like it during those many weeks each year when Congress is preoccupied with the budget resolution or the appropriations bills. In recent decades, about half of all House roll call votes have been budget-related; in the Senate the percentage is even higher.[4]

With this stated, one can understand how much
more important it is in 2012 for the House of Representatives to be truly
accountable to We The People versus
in 1789, when the First U.S. Bicameral
Congress had no income taxing authority over U.S. Citizens. Unfortunately, the Progressive Republicans also enacted the Apportionment Act of 1911which decimatedWe The People’s
check over the House of Representatives.

Students and Teachers of US History this is a video of Stanley and Christopher Klos presenting America's Four United Republics Curriculum at the University of Pennsylvania's Wharton School. The December 2015 video was an impromptu capture by a member of the audience of Penn students, professors and guests that numbered about 200.

1040PC
A 1040PC is a paper tax return prepared on a computer using the approved IRS
tax preparation software. Taxpayers mail the form (return) to the IRS and the
IRS can directly deposit refunds into savings and checking accounts. It's
that simple.

ABILITY TO PAY
Jane makes a ton of money each year, and flies (on her private jet) to and
from her houses in Miami and New York. Tough life. John earns a more modest
salary and rents a small apartment. Jane and John do NOT pay the same amount
in taxes. Their ability to pay differs vastly. John pays less, for his amount
of income (wages, interests, profits) and assets (houses, cars, stocks,
savings accounts) is less than Jane's.

ADJUSTED GROSS INCOME
A person's entire income reduced by adjustments including a deduction for an
IRA (Individual Retirement Account), medical savings accounts, and alimony
paid to an ex-spouse. Note to the wise: Saving money now in an IRA for your
retirement (yes, even though it seems like a million years away) could be one
of your smartest moves yet.

BENEFITS RECEIVED
When people pay taxes according to the amount of government aid (benefits)
they receive. Examples of benefits the American public receives include (to
name only a few): welfare, child care, Medicare, Medicaid. Some people
believe it's only fair that people pay taxes based on the amount of
government aid they receive.

BUSINESS TAXES
Are you a budding entrepreneur? Just remember that businesses pay taxes to
federal, state and local governments. Businesses pay taxes on their profits.
Businesses also pay unemployment insurance, worker's compensation, social
security and Medicare insurance.

CREDITS
If you have a store credit, you can use the credit to purchase merchandise
free of charge. If you have a tax credit, your taxes are reduced by the
amount of your credit. You can get tax credits for purposes such as child
care expenses and the earned income credit for low-income taxpayers.

DEPENDENT
A person who relies on someone else for financial support. Sound like a
mooch? Not really. Think about it- most "young adults" (under 21
years old) are supported by their parents. Is this you? If it is, your
parents can claim an exemption for you-their adorable dependent-if dependency
tests are met

DIRECT DEPOSIT
When you give the IRS the go-ahead, they'll send your refund directly to your
bank account. It's the fastest way to get your cash.

DIRECT TAX
A direct tax cannot be shifted to others (unlike an indirect tax). A good
example of a direct tax is the Federal income tax. You just gotta pay it.

DIVIDENDS
Are you a stockholder? If you are, you receive dividends, or a portion of a
company's earnings and profits.

EARNED INCOME
In simple English: All the money you earn. This includes any wages, salaries,
tips, net earnings (if you're self-employed), and any other income received
for personal services. Add it all up, it's all earned income.

EARNED INCOME CREDIT
Not exactly rolling in dough? Low-income workers can file a tax return to get
an earned income credit, even if no income tax was withheld from the worker's
pay.

ELECTRONIC FILING (IRS
e-file)
It pays to be computer savvy! Taxpayers can now file their tax information
with personal computers and tax preparation software. The information goes
directly to the IRS and the IRS can directly deposit refunds into the
taxpayer's bank account. Electronic filing allows taxpayers to get their
refunds quickly. Check out IRS e-file.

ELECTRONIC FILING (IRS
e-file) OPTIONS
IRS e-file options allow you to file Federal income tax returns (and some
state returns) through a tax professional, through your home computer or even
through your telephone. It may also be available in many other places in your
local community.

EXCISE TAXES
Excise taxes are taxes on the sale or use of certain products or
transactions. So every time you make a telephone call, buy a plane ticket, or
ride in a car (to name but a few) you'll be paying excise taxes.

EXEMPT (from withholding)
Have you ever been exempt from taking an exam because your average was high
enough? What a feeling! Well, taxpayers can be exempt from paying a certain
amount of federal income tax if they meet certain income, tax liability, and
dependency requirements. In fact, you could be exempt from having certain
taxes taken out of your paycheck. If you have a job, be smart and check into
this.

EXEMPT (from tax liability)
Before a taxpayer pays taxes, he/she can claim a set amount of tax deductions
for him/herself, a spouse and eligible dependents. The total amount is
subtracted from the adjusted gross income. Then the tax on the remaining
income is figured out.

FEDERAL EMPLOYER
IDENTIFICATION NUMBER (EIN)/FORM SS-4
EINs are used to identify the tax accounts of businesses. You need to get an
EIN if you have employees or operate your business as a partnership or
corporation. An EIN is also needed if you have a Keogh retirement plan or
file certain tax returns. Form SS-4, An
Application for Employers Identification Number, is used to request an
EIN.

FEDERAL/STATE ELECTRONIC
FILING
Cutting edge! Certain states allow taxpayers to file tax information for both
federal and state income tax returns with home computers and tax preparation
software.

Federal Employer
Identification Number (EIN)/Form SS-4
EINs are used to identify the tax accounts of businesses. You need to get an
EIN if you have employees or operate your business as a partnership or
corporation. An EIN is also needed if you have a Keogh retirement plan or
file certain tax returns. Form
SS-4, An Application for Employers Identification Number, is used to
request an EIN.

FILE A RETURN
To file a return is to send in your completed tax forms, or return
("return" is the official term-use it, you'll sound smarter). All
your tax information appears on the return, including income and tax
liability.

FORM 1040EZ
This form is great if you're single or married, don't have any dependents and
aren't rolling in dough. If your income is $50,000 or less and your interest
income is $400 or less --- use this easy (get it, EZ) IRS form to file your
return.

FORM W-2
By January 31 of each year --- your employer (even if you don't work there
anymore) will provide you with a statement of how much you earned in wages,
tips and other compensation from the previous year. This form will reflect
state and federal taxes, social security, Medicare wages, and tips withheld.
It also includes a lot of other really important information you will need to
file your return.

FORM W-4 (Employee's
withholding allowance certificate)
If you have or had a part-time or summer job, you probably completed this
form on your first day of work. This form determines how much of your
paycheck is withheld for federal income taxes.

FORMAL TAX LEGISLATION
PROCESS
There are strict steps (that involve the President and Congress) that a
proposed tax must pass through before it becomes a law.

GROSS INCOME
This deals with all the money, goods and property you receive that must be
included as taxable income. Fact: people who use the barter system
(exchanging non-monetary goods/services as payment) have to include whatever
they've bartered for as part of their gross income.

INCOME TAXES
These are taxes on income, both earned income (salaries, wages, tips,
commissions) and unearned income (interest from savings accounts, dividends
if you hold stock). Individuals and businesses are subject to income taxes.

INDIRECT TAX
You might not think you're paying this tax, but you probably are. It's the
type of tax that can be shifted to others: hence the name. For example: A
company might have to pay a specific tax to the government, let's say a fuel
tax. The company pays the tax but can increase the cost of their products so
consumers are actually paying the tax indirectly by paying more for the
company's products.

INFORMAL TAX LEGISLATION
PROCESS
Ever joined a book club? What about a study group? Well, if you're
interested, there are also informal tax legislation meetings where
individuals and interest groups get together to discuss tax issues. Once you
become a steady wage earner, these are meetings you probably won't want to
miss.

INTEREST INCOME
You deposit your money into a savings account for a reason, right? So you can
earn interest on your money. People also earn interest from lending money to
people. We're not talking about you lending your buddy Dave a couple bucks to
buy lunch, we're talking about lending lots of money so the interest really
accumulates on the loan. Well, add up all that interest you accumulate and
there's your interest income. Not to burst your bubble, but that interest
income is all fully taxable.

PAYROLL TAXES
Your employer deducts a certain amount from your paycheck to pay for taxes.
This tax money funds many finance specific programs, including social
security, health care and worker's disability. These programs might not mean
a whole lot to you now, but you may likely benefit from them when you're
older. Check out It's
Payday!

PERSONAL INCOME TAX
Everyone pays a tax on his/her yearly total amount of taxable income.
Remember that the personal income tax is not a tax on the taxpayers total
income (the taxpayer can take deductions). Deductions are subtracted first
from the taxpayer's income and then he/she pays the tax on the remaining
amount.

PROGRESSIVE TAX
This type of tax takes a larger percentage of income from higher income
groups than from low-income groups. Is this fair? Check out What is
Fair?

PROPERTY TAXES
It's likely you've landed on "property tax" when playing Monopoly.
In real life, people pay taxes on property, including real estate, boats,
cars, recreational vehicles, and business inventories. Something to think
about before you buy that new car. Check out What is
Fair?

PROPORTIONAL TAX
Proportional taxes take the same percentage of income from everyone
regardless of how much (or little) a person earns. This type of tax is not
currently in use, but some feel it's the way to go. What do you think? Check
out What is
Fair?

PUBLIC GOODS AND SERVICES
Do you attend a public school? Ever wonder who pays for your education?
Taxpayers! Tax money is used for a variety of public goods and services-all
available for use by the public (that includes you and your friends). Some
examples of public goods are national defense, street lights, and roads and
highways. Public services include welfare programs, sanitation, law
enforcement, and education.

REDEVELOPMENT OR ENTERPRISE
ZONE
The government can designate an area as a redevelopment or enterprise zone,
meaning that the area is in desperate need of some serious improvements. No,
your room probably wouldn't make the cut-you'll have to do that restoration
on your own. A neighborhood in complete disarray (burned out buildings,
broken sidewalks, potholes in the street, etc.), on the other hand, could
qualify as such an area and taxpayer money could help fund the restoration
process.

REFUND
When your employer deducts too much money from your paycheck, the government
owes you that money back. When they pay it, it's called a refund.

REGRESSIVE TAX
This is the tax that takes a smaller percentage from those with high income
than from those with lower income. Is this fair? What do you think?

SALES TAXES
You gotta have that new CD, but do you have enough cash? Don't forget to add
the sales tax to the price. Depending on the state you live in, you pay an
extra percentage of sales tax for items purchased.

SCHEDULE
Your class schedule essentially organizes your day, right? Taxpayers have to
be organized too. They use certain schedules (or forms) to itemize specific
sources of income or specific expenses they claim should be deducted from
their taxes. It can pay to be organized!

SOCIAL SECURITY
Social Security is America's government-run retirement plan. One day, when
you're your grandparents' age, you'll get the money back.

STANDARD DEDUCTION
Some taxpayers choose to take a standard amount instead of itemizing all of
their deductions. This is a fixed amount that is generally based on a
person's filing status.

STATE TAXES
There are all kinds of taxes which are used to pay for all sorts of things.
Some of our money goes to the Federal government, which pays for services
like Interstate highways, the armed forces, the FBI, and a lot more. Your
state also needs money for schools, roads, state troopers-to name just a few.
At the end of the tax year, you will need to send one form to the Federal
government, and another to your state government.

TARIFF DUTY (Customs Duty
or Import Duty)
Ever travel abroad and do a little duty-free shopping at the airport? You're
buying tax-free products. When you buy that same product at your corner store
(assuming it's not a duty-free shop), you're paying a tariff duty or tax on
the product.

TAX CREDITS
The amount of money that tax payers can deduct directly from their taxes.

TAX DEDUCTIONS
The amount that a person or business can subtract from their taxable income.
The more you can deduct, the less you pay.

TAX EXEMPTIONS
Pretty excited when you're exempt from gym class? Taxpayers are pretty happy
when they see there's a part of their total income on which no tax is
imposed. That's a tax exemption.

TAX LIABILITY (or total tax
bill)
There's no getting out of it- tax liability is the total amount of tax that a
person must pay. Taxpayers pay this through withholdings, estimated tax
payments, and payments attached to their yearly tax forms.

TAX PREPARATION SOFTWARE
This is software created specifically with the IRS in mind. It's designed to
help you prepare your taxes on a computer. The software works with the
e-filing system to let you file quickly and accurately. Check the Digital Daily for
software recommended by the IRS.

TAX SHIFT
One lucky person or group is able to shift a tax that they're supposed to pay
to someone else.

TAX WITHHOLDING
There's a portion that your employer takes from your (and other employees)
paycheck to pay part or all of your taxes. Check out It's Payday!

TAXABLE INCOME
Everything you earn that can be taxed.

TAXES
Taxes are required payments of money to the government. This money is used to
make your life better. You might not even realize it, but tax money provides
public goods and services for the community as a whole (think roads, schools,
law enforcement, public libraries, etc.). Show a little gratitude, pay your
fair share.

TELEFILE
The IRS knows that lots of people don't have access to a home computer. Most
people do have a touch-tone phone, though. TeleFile lets you use your phone
to send tax information to the IRS computer. The IRS must send you the
booklet. Check out IRS Telefile

TIPS
Here's a tip on receiving tips: If you earn more than $20 a month in tips,
you must report the amount to your employer. To keep track of your tips keep
a daily "tips-earned log" where you write down the exact amount of
tips you earn each day. Share the monthly total with your employer who will
make certain federal, state, and local taxes are paid. Remember, it still
pays to be nice . . . so don't forget to smile. Check out It's
Payday!

Publication 1244 contains
forms for daily record keeping of tips and for reporting tips to your
employer. The freely available Adobe Acrobat
Reader is required to view this publication.

TRANSACTION TAXES
The sale of all goods and services have transaction taxes. These taxes can be
a set percentage of a sales value or a set amount of a physical quantity.
What's that all about? Let's say you buy a CD-you pay a set amount in sales
tax, but when you fill up your tank with gas, you pay a tax per gallon.

VERTICAL EQUITY
Who said all taxpayers are created equal? Vertical equity states that people
in different income groups should pay different rates of taxes. Our current
tax system is one of vertical equity.

VOLUNTARY COMPLIANCE
Your mom might order you to clean up your room. Well, the IRS doesn't have
time to tell every single taxpayer to file taxes correctly and on time . . .
there are millions of taxpayers in this country after all. This system relies
on citizens to report their income, calculate tax liability and file tax
returns on time. Everyone's gotta grow up sometime. Check out It's
Payday!

VOLUNTEER INCOME TAX
ASSISTANCE (VITA)
Available in most communities are Volunteer Income Tax Assistance (VITA)
sites to help with tax return preparation. People volunteer their time to
help their neighbors. The service is free to those with limited or moderate
income people, non-English speaking, the elderly and the disabled. Some VITA
sites even offer free electronic filing. If you want to know more about a VITA
site in your community or volunteering your time, call your local District
Taxpayer Education Coordinator. Check out IRS e-file

WALK-IN ELECTRONIC FILING
If you need help preparing your taxes visit the Voluntary Income Tax
Assistance (VITA) office nearest you. Many VITA offices have IRS
representatives who can help you fill out your forms and then transmit the
information on your forms electronically.

WITHHOLDING
("Pay-as-you-earn" taxation)
Your employer takes out a certain amount from your check for the government.
You are credited for these taxes when you file your return. This money is
used to pay for your federal income taxes, federal social security, and
Medicare taxes, and state and local income taxes. Check out It's
Payday!

WITHHOLDING ALLOWANCE
When you fill out the Form W-4 your employer can figure out the total amount
in taxes to deduct from your paycheck. Your withholding allowance is the
total number of allowances, or exemptions you claim. The employer also uses
your total amount of income earned and marital status to figure out these
allowances and exactly how much income tax to withhold from wages.

Most of the verbiage, pictures, links, and materials used in
this site were produced by Federal agencies and fall into the public domain and
may be reproduced without permission. We have been careful to give credit to
each federal agency with an appropriate link. For more information on use of
government information click here.

[1]
Texas Governor Rick Perry, for example, promoting
himself as a potential Republican nominee for President, maintained on Jon
Stewart’s Daily Show that "Wilson
and the Progressive movement started the
16th Amendment. If you want to know when Washington really got off the track,
the 16th Amendment, giving them the opportunity to take your money with a
personal income tax." (The Daily Show with
Jon Stewart. Comedy Central. November 8, 2010.)

[3] The National Minimum Drinking Age Act of 1984 (23
U.S.C. § 158) is just one among thousands of examples in which states have been
coerced to enact federal laws. This act
was passed on July 17, 1984, mandating that all states be required to legislate
the age of 21 years as a minimum age for purchasing and publicly possessing
alcoholic beverages. Any state that did not comply with the federal law would
be subjected to a ten percent decrease in its annual federal highway
apportionment. Although the majority of
Americans may view the Drinking Age Act in a positive light, it can
nevertheless be seen as a clear infringement of states’ rights.

[4] Lee H. Hamilton, “Congress and the Power of the Purse,”
Center on Congress, 2000 - 2004. congress.indiana.ed.; Hamilton, a U.S.
Representative from Indiana's Ninth District from 1965 to 1999, is the director
of the Center on Congress. http://72.32.58.69/radio_commentaries/power_of_purse.php

[5] For further discussion of the Sixteenth Amendment, see my book, Economic Home Runs (PUB info, date), Chapter I, “It’s the Real Estate, Louis Alexander,” considers a change in the income tax law designed to solve the ongoing national real estate depression.

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Primary Source exhibits are available for display in your community. The costs range from $1,000 to $35,000 depending on length of time on loan and the rarity of artifacts chosen.

The United Colonies of North America Continental Congress Presidents (1774-1776)The United States of America Continental Congress Presidents (1776-1781)The United States of America in Congress Assembled Presidents (1781-1789)The United States of America Presidents and Commanders-in-Chiefs (1789-Present)

*Republican Party - - the political Party organized by Thomas Jefferson and James Madison in 1791 that went out of existence over the schism between John Quincy Adams and Andrew Jackson. Today, for the sake of expediency, political scientists refer to it as the Democratic-Republican Party. Party Members at the time never utilized the name Democratic-Republican because it was the Republican Party.

**Acting US President - David Atchison never claimed that he was the President of the United States for one day on March 4, 1849. Political Scientists who make the assertion claim that because Zachary Taylor refused to be sworn in on a Sunday, March 4, 1849, and both the President and Vice President's term ended on that date the President pro-tempore of the U.S. Senate, David Atchison, therefore became the President under 1849 Presidential succession law.